Greenfields and Acquisitions: A comparative Analysis

Abstract

This paper compares greenfields and acquisitions as foreign direct investment (FDI) alternatives used by transnational corporations (TNCs). First, the determinants leading to the choice of companies between the two modes of entry into a foreign market are laid out. Then, specific features of each alternative are highlighted, by contrasting the advantages and disadvantages of both types of FDI. Based on this analysis, some conclusions are drawn in the end concerning the most important factors that influence the decision of a company whether to choose a greenfield investment or an acquisition.